Identify Which of the Following Statements Is False

question 80

Multiple Choice

Identify which of the following statements is false.

• A)Minority shareholders involved in a Sec. 332 subsidiary liquidation must recognize a gain or loss under the Sec. 331 general liquidation rules.
• B)The parent corporation takes a basis in property received when liquidating a subsidiary corporation in a Sec. 332 liquidation equal to its basis to the subsidiary corporation.
• C)Section 332 is applicable to both the parent corporation and the minority shareholders if they exist.
• D)Property received by a minority shareholder takes a basis equal to its fair market value.

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Definitions:

Factoring

A financial transaction where a business sells its accounts receivable to a third party at a discount in exchange for immediate cash.

Credit Sales

Sales in which revenue is recognized at the point of sale but payment is deferred.

Accounts Receivable

Amounts owed to a company by customers for goods or services that have been delivered but not yet paid for.

Credit Card Expense

Expenses incurred through the use of a credit card, including purchases, interest charges, and other fees.